METV - Midyear Equity Outlook - Investing Beyond The Megacaps

2024-07-03 08:00:00 ET

Summary

• The economy underneath has been very strong, and that’s really what’s enabled the Fed to actually push out those interest rate cuts.
• The best performing sector has been technology with all of the AI powering the technology gains.
• The amount of outperformance we’ve been able to generate in emerging markets has been fantastic, given the dispersion that’s available in that market.

By Nelson Yu

Transcript

Nelson Yu:

If you told me at the beginning of the year that we were going to go from starting with six interest rate cuts to now we're hoping to get one, I would be shocked to say that the equity markets are up 15%. What's really happened was the economy underneath has been very, very strong, and that's really what's enabled the Fed to actually push out those interest rate cuts. I think that's actually really good for the stock market. Clearly, the best performing sector has been technology, of course, with all of the AI powering the technology gains. But the second best-you would never guess-it's actually Japan. And that's really because of the corporate reform movement that's going on with Japan, as well as the weaker Yen. So, then we've also got other economically sensitive sectors-like financials and industrials-doing quite well, underlying the health of the economy, as well as generally the rebuild that's needed in manufacturing....

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